ROTH IRAS
Valuable to Over-40 Investors
If you’re over 40, odds are good that you have a traditional IRA. According to the Investment Company Institute, 85 percent of traditional IRA investors are over 40, and 39 percent are over 60. But even if you rolled your 401(k) assets into a traditional IRA, you may want to switch to a Roth IRA — which is the preference of young people with lower incomes. After you reach 59½ years old, the distributions from your traditional IRA are taxed. This isn’t a problem if you expect a lower tax rate during retirement, which was often the case for retirees. But not anymore. New research shows that about 10,000 people turn 65 every day. That means there are more people on Social Security than ever before. To pay for it, taxes are going to go up, even for retirees drawing from traditional IRAs. For that reason, many are switching to a Roth IRA. Funded with after-tax dollars, the money grows tax-free, and the distributions after you turn 59½ years old are also tax-free. If your single income is less than $132,000 or your household income less than $194,000, you’re eligible for a Roth IRA account. If you earn more than the cut-off, you can still convert from a traditional IRA to a Roth IRA. There aren’t any income limits on people converting to a Roth IRA. Of course, converting means paying the income tax on any amount you convert, usually immediately. For that reason, we tell people to convert only if they don’t have to use their converted funds to pay off the tax that’s due. We also suggest waiting for a year when your total income is down or your investments suffered losses, both of which mean a lower tax bill. Roth IRAs won’t be for everyone, but they can be valuable when considering future tax rates. And if you’re worried about your estate, a Roth account is one way to allow your investment to grow, tax-free.
Sudoku! or movement, especially a falling motion. The reflex usually triggers the newborn to lift and spread their arms as if grasping for support, followed by crying. Though the Moro reflex usually disappears at around 5 to 6 months of age, our instinctive aversion to sudden loud noises stays with us throughout our lives.
Call Now! 513-563-7526 • 3
Made with FlippingBook Online newsletter